16.4 ADVANTAGES AND DISADVANTAGES OF LEASING
16.4.1 Advantages
A growing tendency to favour leasing testifies to the fact that it carries specific advantages. The first advantage is that it helps conserve working capital. This is because leasing does not require a lumpsum outflow of funds in the form of the purchase price of the asset. Cash is thus retained in the business, and can be used for other important purposes.
The second advantage is that lease financing is highly flexible. A lease can be easily negotiated without the approval of the corporate capital budgeting committee and with little documentation. Moreover, the rental payment schedule can be designed to coincide with the cash cycle or the revenue generated from the asset.
The third ...
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